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Fiat SpA, Italy's biggest carmaker, should add electric models and hybrids to its lineup in exchange for continued government incentives, the company's largest trade union said.


While Fiat is already introducing Multi Air gasoline engines that cut consumption and emissions by at least 10 percent, it could go further, Giorgio Airaudo, a leader of the Fiom CGIL metalworkers' union, said Tuesday in an interview with a Bloomberg news service reporter.


"It makes no sense for us to confirm production of old products," Airaudo said by phone from Turin, where Fiat is based. "The government needs to link incentives to innovation."


Unions are concerned Fiat may shift production of new models to North America following its alliance with Chrysler Group LLC.


Fiat, Italy's largest manufacturer and biggest private employer, runs five auto plants in the country, with the workforce totaling 31,000. Fiat Chief Executive Officer Sergio Marchionne has said he intends to cut production in line with shrinking demand.


Instead, the company should bring electric-car technology to Italy through its link with Chrysler, Airaudo said. "There's no reason to limit the development of electric cars to the U.S.," he said. "We should be developing new technology that we can sell in Europe."


Fiat already uses electric technology for its delivery vans, a segment where it sees the most demand. Lou Rhodes, who heads Chrysler's electric vehicle development, has been charged with overseeing the same segment at Fiat, a Fiat spokesman said.


And, as we reported recently, we believe Chrysler will keep doing some electric-vehicle development work and will follow though on its previous promises to put the hybrid Ram truck into the market next year followed by a pair of experimental plug-in hybrids - for test fleet use only - in 2011.


So, while Marchionne remains luke warm on the electric-vehicle market, he hasn't given up on the technology altogether. Until he makes a decision, any decision on where the vehicles would be made would be premature.

Tags: Chrysler, Emissions, Fiat, Fuel Economy, Hybrid, Plug-ins and Electric, Chrysler, Fiat, Hybrid, Italy, Plug-in Electric Car, Plug-in Electric Vehicle

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Italian Government Should Require Fiat to Build EVs and Hybrids, Union Says was originally published by Green Car Advisor. Read the full story by clicking here.